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I FIND it strange that former MP Shriniwas Rai had suggested that MPs should ask for another Select Committee to review the findings of the recently concluded Ministry of Law’s Public Consultation for en bloc legislation, ‘Let Select Committee hear public views’ (ST, May 26).

In 1998/1999, Mr Shriniwas Rai spoke in support of this law when he was a Nominated MP and the present law came into being only after going through a time-consuming Select Committee process.

Nonetheless, we ended up with the present law that has facilitated outright exploitation and unscrupulous behaviour. Justice delayed is justice denied.

I would urge the Ministry of Law to expedite the review of the present law and gazette it as soon as possible to prevent further anarchy.

Examples:

(a) How anarchy has finally hit Singapore in the way sales committees are formed in en bloc sales, culminating in the latest fiasco of Watten Estate having two sales committees, each with its own marketing agent and lawyer.

(b) How hundreds of dollars are being ’short-changed’ in the distribution of collective sales proceeds which is to the obvious detriment of owners of large units. The large units may be double the size of the smaller units because prior to April 2005, the share value bandwidths are in intervals of 100 sq m (since reduced to 50 sq m). This meant that a unit of 101 sq m has the same share value as another unit of 199 sq m (double the size).

Also, the unit-size composition of most estates is such that there are only a few large units/penthouses in each condo and hence this group’s vote is skewed even before voting begins.

As share values determine the voting power and is usually factored in the distribution formula, the self-appointed unregulated Sales Committee and the Majority Small-Unit Owners fully exploit the laxity of the present law by deciding on a distribution formula such that the big-unit owners are getting either the same amount of sales proceeds or a mere 15-20 per cent more even though the unit sizes vary significantly.

As Singaporeans can bash each other up over a Hello Kitty toy or a few dollars of petrol discount, what wouldn’t they do for an outright short-change running into possibly six figures?

Tan Meng Lee (Ms)

Source :  Straits Times - 29 May 2007

YOUR editorial, ‘Cooling the en bloc frenzy’ (ST, May 24), is timely.

However, as reflected in the comments by Mr Shriniwas Rai in ‘Let Select Committee hear public views’ (ST, May 26), it seems to focus mainly on the need to regulate the conduct of collective sales.

I feel the fabric of our society is under threat as evidenced by the discord among the parties involved and it is time for lawmakers to act in the interest of the general public.

I have two concerns about the impact the en bloc frenzy will have on our society.

First, the Government’s efforts at promoting community bonding and building an inclusive society are being threatened.

Neighbours are not talking to each other; and in some cases, the parties involved are resorting to lawsuits.

Such behaviour will erode our social fabric which took us many years to build and will be difficult to mend. Though the number involved may be small, it is, nonetheless, like a thorn in the flesh and it hurts.

There is now a shortfall of some 6,000 units in the private property market and the number is growing. No doubt a large portion is due to sites being sold en bloc which would take perhaps two to three years to redevelop. During this period, demand will outstrip supply, causing prices to escalate.

My second concern is that such escalating prices would put home ownership, both private property and public housing, beyond the reach of the working class.

We can leave the high-end developments to foreigners and speculators but there should be measures to protect the average wage earners against soaring home prices. We are already seeing prices of HDB flats soaring in mature estates and it is only a matter of time before it spreads to the heartlands.

While we should not deprive owners from cashing out and benefiting from selling their properties, the Government should take a broader perspective of the situation and not just allow supply and demand to find its own equilibrium. En bloc sellers are asking exorbitant prices which would in turn result in correspondingly high prices for new properties.

Would the high property prices leave a large segment of the population unhappy, disillusioned and feel left out of our inclusive society?

Are the soaring prices sustainable? I guess it depends on who you talk to. But it doesn’t take one to be an expert to know that the next cycle will come around but when the times are good, people simply throw caution to the wind.

So when the fabric of our society is threatened, the Government should act in the interest of the majority. It is time to draw specific parameters to narrow the gaps so that, in time to come, the majority of our working class can afford a decent roof over their heads in a country they would like to call ‘home’.

Teo Cheng Peow

Source :  Straits Times - 29 May 2007

UOL, Kheng Leong, UIC, SingLand have spent $1.84b since 2005: study

Companies controlled by Wee Cho Yaw have been the biggest buyers of collective sale sites since 2005.

The companies - UOL Group, Kheng Leong, United Industrial Corporation and Singapore Land - have bought a combined 2.3 million sq ft of land through collective sales for a total $1.84 billion between Jan 1, 2005 and May 15, 2007, according to a study by Jones Lang LaSalle.

And that did not even include UIC’s $600 million acquisition of UIC Building on Shenton Way under a collective sale last month as JLL’s study focused on collective sales of developments that involved a residential component.

In any case, market watchers note that UIC already owned 78.8 per cent of the building even before the en bloc sale was sealed.

Other big land buyers in the latest wave of en bloc sales include property magnate Ng Teng Fong’s Far East Organization, which picked up around 1.7 million sq ft of land through en bloc sales for $1.25 billion, and Frasers Centrepoint, which clinched 1.2 million sq ft costing $845 million.

Hong Leong Group, including listed City Developments, snapped up around 1.13 million sq ft for $1.7 billion. GuocoLand was not far behind with 1.06 million sq ft land bought for $1.42 billion.

Jones Lang LaSalle’s regional director and head of investments, Lui Seng Fatt, points out that these top five buyers - Wee Cho Yaw-controlled entities, Hong Leong Group, Far East, Frasers Centrepoint and GuocoLand - together bought 7.4 million sq ft or slightly over 50 per cent of the nearly 14 million sq ft of land that changed hands through collective sales during the period of study.

‘This reflects the big players continue to be confident in the Singapore property market,’ Mr Lui said.

Within Mr Wee’s stable of companies, UOL was the biggest buyer, with 944,011 sq ft of land costing $819 million, followed by Kheng Leong, with 623,428 sq ft costing $368 million. UIC spent $238 million buying 445,363 sq ft of land through en bloc sales while the figures for SingLand were 281,756 sq ft and $419 million.

An industry observer noted that UOL was a significant residential property developer in the Singapore market back in the 1970s and 1980s although it missed out on the 1990s property bull run.

‘This time round, it looks like they want to make sure they don’t miss out,’ he added.

What some analysts also noted is that with the exception of Nassim Park, the collective sale sites that the Wee-controlled companies are buying are mostly not in the super-luxury prime locations.

‘UOL, for instance is buying mostly mid-upper type sites in central locations like Novena and Bukit Merah/Kim Tian that they are familiar with,’ said a market watcher. ‘That’s probably where stable growth will be well supported from demand from en bloc sellers looking for replacement homes - rather than the high-end where the market has gone a little crazy,’ he added.

City Developments has taken a liking for the Balestier/Thomson area in recent months, having acquired a large tract of land there through collective sales like Lock Cho Apartments, Concorde Residences, The Albany and Thomson Mansions.

‘This helps provide some balance to their landbank, which also includes some high-end acquisitions earlier like Lucky Tower at Grange Road and Futura at Leonie Hill Road,’ an analyst notes.

And as high-end residential prices have shot up sharply, it makes sense for developers to reduce their risk profile by increasing their exposure to the upper-mid market which may be less risky, some industry players reckon.

The $1.7 billion that Hong Leong Group has invested in collective sale sites in the Jan 1, 2005 to May 15, 2007 period places it in second spot going by dollar investment, after the $1.8 billion chalked up by entities controlled by Mr Wee.

Other big buyers included CapitaLand, with 600,588 sq ft costing $563 million, Ho Bee, which picked up 452,699 sq ft for $654 million, and SC Global, which has invested $648 million in two locations - Paterson Hill and Cairnhill Circle.

JLL’s analysis also shows that nearly 30 per cent of the $16.2 billion total in collective sale deals transacted during the study period involved acquisitions by joint ventures. Going by land area, too, the 4.3 million sq ft bought by joint ventures reflected roughly 31 per cent of the nearly 14 million sq ft of en bloc sale sites that changed hands during the period.

For acquisitions made by joint ventures, JLL has split the partners’ proportionate shares of site area and investment to arrive at the numbers in the study.

Source : Business Times - 28 May 2007

Some landlords want hikes of 100% or more to renew leases

Rents of private homes are rising so fast that some expatriates are being forced out of prime areas, sometimes into HDB flats, while others are choosing to buy instead.

Expats have been complaining about soaring rents since late last year, with some facing rises of 50 to 100 per cent or more when their leases come up for renewal.

‘I entered this (business) at the end of 1993 and I have never seen such huge rental increases,’ said leasing agent Raymond Han.

Savills Singapore’s director of corporate real estate, Mr Simon Hill, said most of his firm’s recent deals in districts 9, 10 and 11 were at significantly higher rental levels.

‘Certainly, there were no deals done at below a 50 per cent rise in rent,’ said Mr Hill.

An Australian who faced a 66 per cent rent hike for his 1,250 sq ft apartment in Newton recently moved into a HDB flat, preferring that to a condo unit in poor condition.

He now pays $1,500 for a five-room flat in Ang Mo Kio, well under the $1,800 he was paying on his old lease.

‘There is a perception that expats come here on huge salary packages,’ said the expat, who is a teacher. ‘Many are lower-rank professionals like me. So this rental issue just doesn’t come down to a need to revise salary packages.’

He said his colleagues are also reporting exorbitant rent increases.

‘But our rental assistance has increased by only $100 or $200 a month,’ he added.

Official data shows that rents of non-landed homes rose by 8.1 per cent in the first quarter this year, up from a 5.3 per cent rise in the last three months of 2006.

Overall, residential rents remain about 29 per cent below the 1996 peak. But market watchers say the data reflects the situation in the whole market, not just recent renewals or deals in coveted condos and prime areas.

Asking rents at Ardmore Park in the Orchard Road area, for instance, have shot up to between $17,000 and $18,000, from $14,000 to $15,000 a year or two ago.

But some tenants with ongoing leases at the posh estate could still be paying as little as $12,000 a month.

‘I would say the huge increases started only in January,’ said Mr Han.

He is helping an Australian banker find another home, after the expat’s landlord demanded $6,500 a month more for his four-bedroom bungalow in Bukit Timah. That would have meant a monthly rent of $18,000.

The hefty rises have also prompted some frustrated expats to buy instead of rent, said property agents.

Housewife Cara Killham and her husband, a teacher, chose to buy after rental demands for their Clementi condo became too extreme.

‘The rise in rentals got us looking for a place. That was the tipping point,’ said Ms Killham, a British citizen who came here eight years ago.

The couple recently decided on a unit of about 1,600 sq ft in Dairy Farm Estate on Dairy Farm Road.

‘Our mortgage and condo fees would still be less than the monthly rent,’ she said.

Mr Hill of Savills Singapore told The Straits Times: ‘What we are seeing is a massive resistance building against the rental increase.

‘Either companies won’t bring in so many expats, or expats will move out of districts 9, 10 and 11.’

Yet, there are still expats, mostly those new to Singapore, willing to take up the new rental offers, agents said.

Apart from strong demand, rents have also risen as a result of tight supply caused by the many collective sales.

It means a double whammy for companies, as rents for quality office space have risen sharply as well.

‘Finding a new place is very difficult,’ said an expat in the technology sector. ‘We have made a number of offers and had cheques cashed, only to be told that the landlords had changed their minds.’

‘It has been very stressful, and has forced us to reconsider our future in Singapore.’

Source : Straits Times - 28 May 2007

Short supply in crowded city centre sees demand for outlying properties soaring

IMAGINE prices of homes in Singapore’s Jurong catching up with those in Orchard Road.

Well, it has happened - in Hong Kong, that is, where demand for top-end homes on the outskirts has soared due to limited supply in the city centre. And some of these locations could be an hour’s drive away from downtown.

Prices of homes in the suburbs have seen a surge of as much as 10 per cent in the past year. The upward trend, especially for the high-end sector, is expected to continue through the year, industry players say.

Highlighting this trend, Ms Karen Choi, who heads research at property consultancy Vigers in Hong Kong, said that as of April, sales for homes worth HK$10 million (S$2 million) grew nearly 200 per cent over a 12-month period.

In contrast, the sale for homes in general grew about 40 per cent over the same 12-month period.

More interestingly, Ms Choi told The Straits Times, values of some upcoming top-end homes in countryside areas such as Sai Kung, Tai Po and Sheung Shui - typically bungalows or semi-detached houses with full sea views and designer fittings - are set to surge to as high as HK$20,000 per sq ft.

This was the cost of a new home in Hong Kong’s traditional luxury areas, such as the Peak and Repulse Bay, in 2005 when the city’s property market started recovering from the economically crippling Sars epidemic of 2003.

Homes in these luxury areas have now soared higher to exceed HK$25,000 per sq ft in average value.

‘But given that, going forward, there is limited supply coming into these traditional luxury areas, it is really not surprising that top-end homes in the outskirts have attracted big interest,’ said Ms Choi.

‘The demand for luxury properties is still quite prominent despite soaring capital values.

‘This sector is a lot more resilient than the mass market. For example, while prices of homes on average plunged by 60 per cent after Sars struck, those for top-end properties fell by a much lower 20 per cent.’

A lot of high-end buyers at Tai Po and Sheung Shui, near mainland China, are Hong Kong or mainland industrialists who own factories or investments in neighbouring Shenzhen city across the border, Ms Choi noted.

‘Increasingly, however, I do see more top- level executives who work downtown coming out to either rent or buy in these areas.’

Boosted by a sustained economic recovery and healthy stock market, the luxury property sector has boomed over the past year.

March saw the sale of the most expensive home ever - a house in the Peak district which cost HK$38,500 per sq ft - and the most expensive apartment unit, at HK$32,000 per sq ft.

It is not expected to stop there, with one of Hong Kong’s leading developers, Sun Hung Kai Properties, having forked out last December HK$1.8 billion - a record HK$42,196 per sq ft - for a plot of land at the Peak.

This means that prices of new homes there will have to be set above current records, possibly as high as HK$60,000 per sq ft, analysts say.

Sun Hung Kai is also co-developer of the luxury Orchard Turn condominium in Singapore, which holds the city state’s record home price of S$4,000 per sq ft.

The phenomenon of expensive homes in the suburbs underlines the depth of Hong Kong’s property market, experts noted, compared to places like Singapore.

While the price of the costliest home in Tai Po will still be enough to buy a home in the heart of town, they said, the costliest one in Jurong - at about S$500 to S$600 per sq ft - is no match for even the cheapest Orchard Road flat.

‘Even in top Singapore suburbs like Tanah Merah, the top price ranges at just over S$600 psf,’ Mr Michael Ng, managing director of Savills Singapore, told The Straits Times.

‘This is nothing compared to at least S$1,000 psf for homes in Orchard Road and the prime districts, if these are available now in the resale market.

‘It will still take a while for the Singapore property market to catch up with the Hong Kong one, if at all.’

Source : Straits Times - 28 May 2007